Since January 2020, several small and large pharmaceutical companies worldwide have expanded their research efforts to investigate a drug therapy or vaccine to treat or prevent COVID-19. According to COVID-19 therapeutic development tracker by BIO’s Industry Analysis Team, as of August 8th, 708 unique compounds are in development, of which 181 are vaccines, 207 are antivirals and 320 are treatments. Total 435 compounds are in pre-clinical phase and 273 compounds are in clinical phases (42 in phase I, 135 in phase II, 68 in phase III and 28 in phase IV).
While several therapeutics and vaccines are under development and Ramdesivir and Dexamethasone are getting promoted as potential effective therapies to treat COVID-19, the important question is- how will you price these drugs and vaccines if they get approval from the FDA?
Recently, ICER published a white paper titled “Alternative Policies for Pricing Novel Vaccines and Drug Therapies for COVID-19” which describes six approaches to manage the pricing of therapies and vaccines during pandemics such as COVID-19 and they are:
No approach is perfect to price the drug or vaccine to treat or prevent pandemic like COVID-19 and has their own advantages and limitations. While a cost-recovery pricing approach may make therapeutics affordable, it may have a negative impact on the innovation. On the other hand, value-based pricing may encourage innovation by providing incentives to companies, but it only considers clinical benefits and not other broader benefits that are valuable to society as a whole. Dr. Kamal-Bahl and his fellow researchers underlines the importance of including additional value elements such as fear of contagion, insurance value, reduction in uncertainty, severity of disease, value of hope, real option value, scientific spillovers, equity and family spillover effects while evaluating value of new treatments and vaccines for COVID-19.
The authors state “As scientists continue their efforts to develop new therapeutics and vaccines to treat and prevent COVID-19, other stakeholders—health technology assessment bodies, payers, policy makers, manufacturers, and health economists—have a responsibility to also ensure innovation in value assessment.”
The value assessment and pricing approaches of new treatments and vaccines for COVID-19 should consider benefits beyond clinical benefits and costs beyond intervention/medical costs.